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A company can make use of the bargaining powers of the customers to strengthen its position. The low cost strategy it can employ is to reduce the price of its most powerful buyers. This in effect will retain its most loyal buyers, attract new buyers and will help the company maintain its revenues. To keep the company ahead of the park, it can differentiate its good and services such that the buyers really have no alternative other than buying its products. This can be achieved if the company has creative and highly innovative employees, especially its production team. Dominating a market has the same effect as differentiating a product. This very specific focus on a market gives the buyers a limited range of alternatives. As a result, they have no choice but buy the products. The company can take such preemptive measures like giving its buyers some incentives. For example, giving discounts on some items and providing after sales services. This will strengthen the company’s position among the buyers.


There are some socio-economic factors that a company can’t control in the short term. For example, the inflation rate in a country. When the inflation rate rises so sharply, the buying power of consumers is substantially reduced. However, a company can price its products a level below the overall inflation rate. This will keep its buyers and will also attract other buyers. This low cost will be compensated by having a large clientele. If a product is one of its kinds in a market, the buyers will have no choice but go for it, regardless of the inflation rate. On the other hand, if a company is in a dominant position in a certain market, it makes it less susceptible to the overall inflation rate. Measures can be put to protect a company in the event of high inflation rate. For example, it can systematically cut out any intermediaries so that it deals with the customers directly. This in effect reduces the cost of products.


The world is evolving at such pace as a result of new technological advancements. A company should strive to make use of this advancement. New technology in essence helps a company to do tasks at a much lower cost. Therefore, if there’s a cheaper way of doing a certain task, the company should not hesitate to embrace this way. This will reduce its operating cost yet maintain or improve its revenues. A company should also strive to be the market leader by being the first to always introduce new products in the market, before its rivals do. This will help raise its standing in the eyes of the buyers. If a company is fully focused in a market, it will make sure that this market enjoys its new products almost all the time. The customers will get the impression that it’s the leader in innovation. Hence, it will get many more customers, and revenues. So that a company is not left behind technologically, it has to have a production team that is technologically savvy, innovative and very creative.                               


A company should always be aware that there are other companies out there that offer the same services. These companies may also try to enter in to competition by launching its services in a market already occupied. A company can take low cost measures to discourage the threat of new entrants. It can do this by systematically lowering prices in such a way these low prices will be compensated by having a large customer base. New penetration in this market will be difficult for a new company. The companies would rather stay away from the market. Also, if a company introduces market-specific products, the buyers tend to be loyal to it. This in effect discourages new entrants. Additionally, absolutely dominating a certain market acts as a barrier to the entry of new competitors. A company can take preemptive measures like aggressively marketing itself to the public, and a market, such that new entrants will have to think twice before launching its services in the same market.

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